Entrade, Environmental Offsetting and Trading

[holwellcourtfarm]

All DEFRA have to do is offer roughly the same as industry for EG, and arguably a bit less if ELM becomes exclusive i.e. you can't get double funding. What is the alternative funding stream going to be, other than the owner's benign largesse to improve the view & their consciences?

If ELM is based on "no double funding" then it's dead in the water IMHO. Potentially the money on offer for traded ecosystem services dwarves the current Ag support budget.

• Carbon offsets
• Planning "Biodiversity net gain" offsets
• Water company pollution reduction agreements
• WNP flood risk reductions
• etc

 

[Brisel]

If ELM is based on "no double funding" then it's dead in the water IMHO. Potentially the money on offer for traded ecosystem services dwarves the current Ag support budget.

• Carbon offsets
• Planning "Biodiversity net gain" offsets
• Water company pollution reduction agreements
• WNP flood risk reductions
• etc

You've hit the nail on the head. There is usually a sting in the tail with government schemes - your 30 year deal with Cemex or Persimmon Homes might fit the first 5 years of CS/ELM prescriptions but not if they move the goalposts later on...

 

[ollie989898]

Yes, it is a load of rubbish, but it is also an opportunity for farmers to cash in on the soon-to-be legislated requirement to offset. The ethical market will also push corporate social responsibility towards this virtue signalling. Some good may come of it regarding polluting practices - Yara & CF will use different techniques to produce green ammonia for fertiliser production (electrolysis of water instead of reducing natural gas). Is the cost of production cheaper? Is the carbon footprint smaller? They claim it to be so. Is this just another way of attacking urea? Yep.

View attachment 942322

What a crock of... no CO2 available for urea- what about the non-trivial amounts in the air?

Urea has substantial advantages compared to ammonia.

 

[Dave645]

Biggest load of nonsense I've seen in a long time.

Money for old rope only there is no money and there is no rope.

Why does the UK persist with this make-believe carp? FFS, what is wrong with the old fashioned way: creating a tangible product or service and then selling it? Create wealth, not just try to constantly redistribute it in some kind of circle jerk.

I would worry if this starts to put a value on things that at some point our farms will be assessed, and if we are found to be negative we will be forced to by credits. Or pay penalties.
I see why they are doing it it’s a way of improving farmings image, right up to the point they start to point there measuring stick at us.
If I was running this scheme I would make sure any farm selling credits has a positive number to sell, and that if sold the farmer gets to pick who too. And at what price.
As for green washing as it’s called, I think if they do buy credits what ever they spend on buying credits has to be matched in implementing permanent ways that there company is reducing there requirements to buy credits.
If that’s carbon capture etc, so at some point they do not need credits.

So buying credits is a double whammy not a way to avoid fixing the problem. And credits that are for sale are actually real in the first place. Based on the farm that’s selling them actually having a surplus to sell.
So if a bad company needs 1millions pounds worth of credits they have to spend a million pounds on permanent solutions to there pollution.

 

[ollie989898]

I would worry if this starts to put a value on things that at some point our farms will be assessed, and if we are found to be negative we will be forced to by credits. Or pay penalties.
I see why they are doing it it’s a way of improving farmings image, right up to the point they start to point there measuring stick at us.
If I was running this scheme I would make sure any farm selling credits has a positive number to sell, and that if sold the farmer gets to pick who too. And at what price.
As for green washing as it’s called, I think if they do buy credits what ever they spend on buying credits has to be matched in implementing permanent ways that there company is reducing there requirements to buy credits.
If that’s carbon capture etc, so at some point they do not need credits.

So buying credits is a double whammy not a way to avoid fixing the problem. And credits that are for sale are actually real in the first place. Based on the farm that’s selling them actually having a surplus to sell.
So if a bad company needs 1millions pounds worth of credits they have to spend a million pounds on permanent solutions to there pollution.

This would be my concern too. 'Oh hello Mr Farmer- we are implementing a carbon charging system for all emitters of green house gases. Oh, you've got cattle have you? Well, that's X kilos of NOx you are emitting per head then and Y kilos of methane. Those are both Z times more potent as greenhouse gases than that regular CO2 from cement making. Your operating charge will be £34,000 per year. Don't worry, just add it to your usual payment to the treasury, have a nice day now'.

 

[Dave645]

This would be my concern too. 'Oh hello Mr Farmer- we are implementing a carbon charging system for all emitters of green house gases. Oh, you've got cattle have you? Well, that's X kilos of NOx you are emitting per head then and Y kilos of methane. Those are both Z times more potent as greenhouse gases than that regular CO2 from cement making. Your operating charge will be £34,000 per year. Don't worry, just add it to your usual payment to the treasury, have a nice day now'.

Yep farmers need to make sure we have all our ducks in a row, and we will not fall foul to them at some point.
I personally think the idea of credits is fine if done correctly, but I would want to see how easy it would be for me to meet those targets first. Then and only then back a credit selling scheme.
Being carbon neutral, is no bad target for any business but until some from of guidance is out on how to assess a whole farm I would be nervous about starting one up.
When you start adding fertiliser and sprays, and diesel, add them and electric etc, where will farmers fall.
the electric is the only saving grace so far the grid is actually getting greener year on year, but is everything else.
Maybe a carbon cost is needed so we all start to do our bit, but first we need to make sure we are on the right side of the line. If farmers are not then this is a non starter and putting a carbon credit scheme in place will bite us at some point.

 

[Brisel]

What a crock of... no CO2 available for urea- what about the non-trivial amounts in the air?

Urea has substantial advantages compared to ammonia.

I hear you loud & clear. We've discussed the urea v AN debate elsewhere - Yara & CF stand to gain significantly from removing global urea from the UK market place as it's what keeps them keen on AN pricing. You won't hear them saying much about how much more leachable nitrates are than ammonium.

 

[Raider112]

Well if the 1000t CO2 emitted is roughly 300 kg of carbon and if the market price for carbon was £30/tonne that tonne of cement just got £9000/t more expensive to make, so concrete will be used less and other construction material like timber etc will be used instead, or other products used. If you use lime instead of cement in mortar it grabs CO2 as it cures therefore fixing C again (C was released during manufacture).

So this will reduce demand for concrete except in situations where it can't be substituted......

Perhaps you'll plant trees not only for biodiversity, flood mitigation and C capture but also as a future building material. I'm just planning a 4ha end of field that never earnt a penny in cereals and it's got a large proportion of Oaks in the species mix and the hope is they will be big enough in 40-50 ish years to be processed as construction beams and columns. I'm registering it with the woodland carbon code so I can trade the C and return me an income in yrs 5,15,25,35 etc

That woodland will help offset that C which can't easily be erased from the farm system, then the rest can be traded........

So to your original question, it won't be business as usual for concrete their additional cost will reduce demend for it and they will have to compete with steel makers (at the moment), quarries, airlines, builders, water companies and the list is endless for carbon to offset until the whole economy rejigs to next to no carbon emmissions.

It will be the cost of the carbon that will drive the change...........away from emitting it. It'll probably be 10's of years to shift so c trading initially will drive the change.

To be honest it's taken me about a year to get the whole thing straight in my own mind so initial scepticism etc is totally normal.

So who gets the credit (for want of a better word) for these carbon credits? the NFU say they want agriculture to be carbon neutral by 2040 but if we all sell our credits there's no chance of doing that. Either the farmer owns them or the concrete company owns them but we can't both claim them. It looks to me as if the polluters carry on doing what they are doing with a bit of paper saying they are carbon neutral and the daft old farmers who are doing good end up looking like the worst polluters on earth.

 

[N.Yorks.]

Yep farmers need to make sure we have all our ducks in a row, and we will not fall foul to them at some point.
I personally think the idea of credits is fine if done correctly, but I would want to see how easy it would be for me to meet those targets first. Then and only then back a credit selling scheme.
Being carbon neutral, is no bad target for any business but until some from of guidance is out on how to assess a whole farm I would be nervous about starting one up.
When you start adding fertiliser and sprays, and diesel, add them and electric etc, where will farmers fall.
the electric is the only saving grace so far the grid is actually getting greener year on year, but is everything else.
Maybe a carbon cost is needed so we all start to do our bit, but first we need to make sure we are on the right side of the line. If farmers are not then this is a non starter and putting a carbon credit scheme in place will bite us at some point.

Here's the woodland carbon code info: https://woodlandcarboncode.org.uk/images/PDFs/WWC_V2.0_08March2018.pdf

Allows you to sequester carbon via woodland and then get a guaranteed payment from an initial reverse auction with govmt. Then if you want you can jump out of the government payments and trade C privately if it's trading at values higher than your original auction value. They are in effect kick starting the C capture and giving you the flex to then trade it as and when C values are higher. It doesn't seem too high risk at all where you've identified land that costs you to farm as it's incapable of breaking even traditionally......

 

[Brisel]

So who gets the credit (for want of a better word) for these carbon credits? the NFU say they want agriculture to be carbon neutral by 2040 but if we all sell our credits there's no chance of doing that. Either the farmer owns them or the concrete company owns them but we can't both claim them. It looks to me as if the polluters carry on doing what they are doing with a bit of paper saying they are carbon neutral and the daft old farmers who are doing good end up looking like the worst polluters on earth.

I haven't done the calculations for my farm yet but I doubt I have spare carbon credits to sell, so this is slightly moot until we do something very different. I grow oats for Quaker & their parent company, PepsiCo, is very keen to explore its growers' carbon footprints. Nothing firm so far, but I have a questionnaire to fill in for them about how much woodland we have planted recently etc and they will pay us another £1/t for giving them this information.

 

[holwellcourtfarm]

they will pay us another £1/t for giving them this information.

Which they will (probably) then claim credit for as part of their "supply chain" thereby off-setting emissions further along their chain......

 

[onesiedale]

It will be the cost of the carbon that will drive the change...........away from emitting it. It'll probably be 10's of years to shift so c trading initially will drive the change.

To be honest it's taken me about a year to get the whole thing straight in my own mind so initial scepticism etc is totally normal.

It's carbon, or rather the burning of it, that has driven the global economy in the last 200 years. Now corporate business is realising that the next wave of money to be made from raping the earth's natural resources is by putting carbon back where it belongs, in the soil.
Trouble is , too many landowners and managers to control here, so the control will have to be wrapped up in financial and legal arrangements all made possible by legislation
This is going to be a tough one to stand up against.

 

[Brisel]

Which they will (probably) them claim credit for as part of their "supply chain" thereby off-setting emissions further along their chain......

That assumes that their growers are C negative at best. It will be an interesting exercise to do.

Last week's Yellow Comic had an article in the arable section about a farm level trial and what could really reduce it. Agroforestry seems to have a very big carbon sink with fertilisers & cultivations as carbon demanders. No big surprises there really.

 

[N.Yorks.]

So who gets the credit (for want of a better word) for these carbon credits? the NFU say they want agriculture to be carbon neutral by 2040 but if we all sell our credits there's no chance of doing that. Either the farmer owns them or the concrete company owns them but we can't both claim them. It looks to me as if the polluters carry on doing what they are doing with a bit of paper saying they are carbon neutral and the daft old farmers who are doing good end up looking like the worst polluters on earth.

Say you have schemes that capture 1000 C credits in 30 years (I'm making up figures to illustrate) via soil OM increase from say 2% to 5% and a new woodland, these will accrue to you as the soil OM% (C%) increases over time and for that C captured by woodland.

Yr 1. 1 credit
Yr2. +2 credit (total 3)
Yr4. +3 credit (total 6)
Yr5. +4 credit (total 10)
Yr.6 + 7 credit (total 17)
.........
Yr.10 +30 credit (total 90)
..........
Yr.20 +300 (total 400)
........
Yr.30 +500 (total 1000)

The credits accrue to your business, you can take whatever you need to offset against your enterprise mix and sell the remainder.

As you can see there will be relatively less C credits in the first few years so prices should be high and as these credits become more numerous the value may drop, but govt can legislate to maintain their value if necessary to do so I guess.

You can't sell what you haven't accrued......

 

[Dave645]

Here's the woodland carbon code info: https://woodlandcarboncode.org.uk/images/PDFs/WWC_V2.0_08March2018.pdf

Allows you to sequester carbon via woodland and then get a guaranteed payment from an initial reverse auction with govmt. Then if you want you can jump out of the government payments and trade C privately if it's trading at values higher than your original auction value. They are in effect kick starting the C capture and giving you the flex to then trade it as and when C values are higher. It doesn't seem too high risk at all where you've identified land that costs you to farm as it's incapable of breaking even traditionally......

But who is saying that your farm is carbon neutral or negative to have the ability to actually trade your actual surplus. Only that guarantees your not selling a lie.

All the scheme looks at is the woodland and its carbon account not the whole farm as a bundle.
The farm maybe intensive pigs and maybe when it’s calculated out the farm is a net co2 contributor, even with the woodland, if that’s the case the credits the new woodland being should not be for sale.
At some point all businesses will come under the Co2 accounting system, I would be wary selling something that I may need myself.

 

[N.Yorks.]

But who is saying that your farm is carbon neutral or negative to have the ability to actually trade your actual surplus. Only that guarantees your not selling a lie.

All the scheme looks at is the woodland and its carbon account not the whole farm as a bundle.
The farm maybe intensive pigs and maybe when it’s calculated out the farm is a net co2 contributor, even with the woodland, if that’s the case the credits the new woodland being should not be for sale.
At some point all businesses will come under the Co2 accounting system, I would be wary selling something that I may need myself.

That where working out the farm C budget is necessary:

https://www.farmcarbontoolkit.org.uk/

You can DIY it easily enough, it will need time to sit down and do though.

 

[Dave645]

I haven't done the calculations for my farm yet but I doubt I have spare carbon credits to sell, so this is slightly moot until we do something very different. I grow oats for Quaker & their parent company, PepsiCo, is very keen to explore its growers' carbon footprints. Nothing firm so far, but I have a questionnaire to fill in for them about how much woodland we have planted recently etc and they will pay us another £1/t for giving them this information.

Red tractor is going down the same lines. Farmers need to get out in front of this, we need to know where we stand before trading starts or we maybe the ones having to by in Co2 credits every year to get signed of for assurance schemes.

 

[Raider112]

Say you have schemes that capture 1000 C credits in 30 years (I'm making up figures to illustrate) via soil OM increase from say 2% to 5% and a new woodland, these will accrue to you as the soil OM% (C%) increases over time and for that C captured by woodland.

Yr 1. 1 credit
Yr2. +2 credit (total 3)
Yr4. +3 credit (total 6)
Yr5. +4 credit (total 10)
Yr.6 + 7 credit (total 17)
.........
Yr.10 +30 credit (total 90)
..........
Yr.20 +300 (total 400)
........
Yr.30 +500 (total 1000)

The credits accrue to your business, you can take whatever you need to offset against your enterprise mix and sell the remainder.

As you can see there will be relatively less C credits in the first few years so prices should be high and as these credits become more numerous the value may drop, but govt can legislate to maintain their value if necessary to do so I guess.

You can't sell what you haven't accrued......

But as farmers are supposed to be killing the planet all that could be difficult.

 

[Dave645]

That where working out the farm C budget is necessary:

https://www.farmcarbontoolkit.org.uk/

You can DIY it easily enough, it will need time to sit down and do though.

That’s great, if I was sat on a nice Co2 credit surpluses then if it has a value and the selling of them is not used as a means to avoid improving another business Co2 emissions, over the long term then trade away.

 

[Brisel]

Red tractor is going down the same lines. Farmers need to get out in front of this, we need to know where we stand before trading starts or we maybe the ones having to by in Co2 credits every year to get signed of for assurance schemes.

This wouldn't surprise me at all, if RT continue to spread their tentacles the way they are currently.

What do you understand of Theresa May's parting gift to the country to partly legislate that we become net zero as a nation by 2050? Obviously Westminster will move the goalposts as necessary, but I can see mission creep appearing before then for certain markets to demand that their suppliers have the correct paperwork to say that they are at leats net zero. I can see it coming into fresh produce & added value contracts e.g Waitrose, before commodity level grains, milk, eggs & meat.